19.A rock-climbing school faces two demand curves. The demand by local residents isQ= 400 ?0.5P, and the demand by others isQ= 500 ?0.5P. The marginal cost of servingeither local residents or others is constant at $100. If the rock-climbing school practicesthird-degree price discrimination, it will charge local residents and others a price of_____ and _____, respectively.
20.Sparkling Water Co. has determined that for Michigan residents the price elasticity ofdemand for a case of its purified water is ?.0, while the price elasticity of demand forFlorida residents is ?.5. Assume that the marginal cost is constant at $8. What price percase should Sparkling Water Co. charge Michigan and Florida customers?A)Customers in Michigan and Florida should be charged $16.B)Michigan customers should be charged $11.94 and Florida customers charged$13.33.C)Michigan customers should be charged $10 and Florida customers charged $14.D)Customers in Michigan and Florida should be charged $13.33.
21.The purchase price for Stata version 12 (statistical software used by many economists)is $895. For users of Stata version 11, the price to upgrade to version 12 is $395.Which of the following statements is (are) TRUE?
22.A firm practicing third-degree price discrimination may:I.segment its customers by age, such as offering senior citizen discounts.II.charge customers living in certain zip codes a higher price than customers living inlocations.III.initially charge high prices and then reduce the price over time to sell to the moreprice-sensitive consumers.